WASHINGTON - The number of Americans applying for unemployment benefits rose last week by 17,000, reversing four weeks of declines. But the number of people seeking aid is consistent with a job market that continues to grow modestly.
Unemployment claims rose the week of Dec. 15 to a seasonally adjusted 361,000 from a revised 344,000 the week before.
The less-volatile four-week moving average fell 13,750 to 367,750, lowest since late October. Applications had surged in early November after Superstorm Sandy, then dropped back.
In this Oct. 25, photo, Angela Winters of Schenectady, N.Y., center, talks to a recruiter during a job fair at the Marriott Hotel on ,in Colonie, N.Y.
Just over 5.4 million people were receiving some type of unemployment benefit the week ended Dec. 1, down from nearly 7.2 million a year earlier.
Applications are a proxy for layoffs. So the drop of the four-week average suggests that companies are cutting fewer jobs, even if they aren't hiring enough to lower the unemployment rate significantly. The economy has generated an average of 151,000 jobs a month in 2012, not enough to significantly drive down high unemployment.
The unemployment rate did drop to a four-year low of 7.7 percent in November from 7.9 percent in October. But the rate fell mostly because unemployed people gave up looking for work. The government counts people as unemployed only if they're actively seeking jobs.
Still, the steady drop in unemployment applications suggests that companies aren't laying off workers in advance of the "fiscal cliff" - the package of tax increases and spending cuts set to take effect next year if Democrats and Republicans can't reach a budget deal.
President Barack Obama said Wednesday that he was "pretty close" to an agreement with House Speaker John Boehner to avoid a Jan. 1 shock to the economy. But Democrats and Republicans are still sparring over details of Obama's effort to raise taxes on higher-income earners.
"The steady improvement in weekly claims won't matter one bit if the economy enters the new year with fiscal cliff-induced uncertainty," said Dan Greenhaus, chief global strategist at BTIG LLC, wrote in a note to clients. "Claims will shoot higher as businesses shift staffing levels in front of an anticipated drop in demand during the beginning of next year."